It’s not a matter of “If”, it’s a matter of when. Google’s expected phase-out of third-party cookies in late 2023 should make the death of the cookie officially official. This isn’t breaking news, as with 2023 halfway upon us it’s something marketers have known about and have been planning around for several years now. The difference? – Now they must be ready to execute a first-party data strategy sooner than later, or risk being left behind.
For marketers, the death of third-party cookies will impact advertising, attributions, and reporting like Google Analytics 4. Middle ad tech players may have smaller pools of data while the walled gardens of the Big 3: Google, Facebook, and Amazon; will hold and control the majority of data in the ad space. CPMs for quality data will likely rise. Advertisers will need a more sophisticated approach to make ads more relevant. However, as the 3rd party cookie crumbles, out of the crumbs has arisen an opportunity. A chance for evolution and potential change for the better. In this case, a reliance on first-party data is going to give customers the more personalized, relevant, and real-time experience they’ve been seeking from brands. The onus is now on brands to execute in a responsible way that protects consumer data and privacy while delivering a meaningful and engaging experience.
Brands that have already begun to switch to a first-party data strategy are wise in doing so. Today’s consumers demand a brand experience that is personalized, consistent, relevant, convenient, and connected across all devices and channels. They’re willing to share their data (with control) to get that experience and ready to switch to another brand or stop buying from their now “once favorite” brand if they don’t. Basically, it comes down to this……people are unique individuals who want unique experiences. However, only 28% of marketers believe they’re delivering that to customers.* For the 60% of marketers using Personalization, it’s paying off with over a 10% lift in revenue.** So what’s the hold-up?
For many brands, the main barrier to effective use of first-party data has been data silos – in many cases, different tools, systems, disparate sources, and teams simply don’t talk to each other to share information. Overcoming this barrier is often seen as a holy grail of sorts in the omnichannel marketing world – creating a single unique 360-degree customer view – a complete, holistic, deduplicated, and actionable view of customers. Brands should first focus on harnessing and unifying first-party data sources before potentially incorporating second-party data sources to create a richer, more robust customer profile. For others, barriers for them are that they think personalization is too costly or resource-intensive to implement and they have trouble seeing the immediate ROI. We’re here to help.
So what needs to happen to bridge the gap and get brands over the hump to enable a first-party data strategy? A vision, thoughtful planning, and the tools and technology to help them overcome barriers. As a Salesforce Certified Partner, List Engage has helped brands transition to develop first-party data strategies and use Salesforce to implement the technology aspect of delivering an A+ customer experience. As we talk to current, new and prospective customers who know the importance of first-party data, how to leverage it, and who want to shift to a first-party data strategy, our conversations typically start around these 3 main pillars:
- First-Steps Toward a First-Party Data Strategy
- First-Party Data Collection Tools and Tactics
- Bringing Data & Personalization to Life with Technology
First Steps to Toward a First-Party Data Strategy
As brands begin to have conversations around or transition to a first-party data strategy, we recommend using these principles as your north stars or guiding lights.
- Customers First, Always, and Forever
The key to building a total customer experience is ensuring you shift to a customer-led approach versus the channel-led approach of the yesteryears. Use first-party customer data in a customer-centric way by making it easier for the customer to find what they need, how, and when they want, and provide them with experiences that will inform, surprise & delight.
- You Get What You Give
Value exchange is essential. Offer consumers real benefits when they interact with your brand across all touchpoints which can lead to breakthrough moments and the ability to capture their first-party data. For example, help the customer do or find something in an easier way and empower the consumer to share their experiences and make it easy for them to do so.
- Leverage Your Ability to Influence Customers
40% of a company’s business is generated by the 8% of their consumers who have the highest engagement levels, according to Adobe’s Digital Index. You have the ability to bring those customers and others across the finish line. It’s important to influence consumer behavior and actions to get them to do what you want, typically to make a purchase, fill out a form, etc. Incorporate best practices to help influence behavior and capture precious data. Use fewer form fields and only ask for what you need (i.e. make phone optional). This will lead to more conversions and data you can use and start to build upon as they progress in their journeys.
- Operate with a Privacy-First Mindset While Protecting Customer Data
Use first-party data strategically, only where it makes sense or where you have been given permission by the customer. Be transparent about first-party data collection and use and take great care with Data Governance.
- Bringing It All Together: Using Technology as an Enabler
Use platforms like Salesforce + Customer Consent + First-Party Data + CDP + Personalization to help you create the desired customer experience and optimize it to achieve your goals
Next, Set Your First-Party Data Goals (Here Are Some Examples)
Using the principles above, it’s now time to start by setting your first-party data goals. This will depend on a brand’s particular objectives. Our strategic consultants and some of the clients we’ve worked with have leveraged first-party data in their marketing efforts and across their business to:
- Construct lookalike audience campaigns for prospecting, acquisition, and new market penetration
- Improve engagement by educating and nurturing new opt-ins on product or service features and benefits proactively to build interest, engagement, and conversion
- Upsell/Cross-sell additional product recommendations or get customers to spend more on a fancier surround-sound system by identifying consumer needs and interest overlaps to promote messages designed to increase AOV, cart or ticket size
- Gain marketing efficiencies by reducing wasted media spend. Trim the fat from marketing campaigns and channels in your marketing mix that isn’t ROI positive and improve targeting, personalization, and ad relevance.
- Build affinity and loyalty by understanding customers’ fears, goals, pain points, and joys. Anticipate their needs and wants and segment customers to drive LTV, Loyalty, and HHP
- Increase marketing effectiveness by driving higher levels of engagement by targeting consumers in their moments of receptivity/decision across each touchpoint in their journey
First-Party Data Collection & Tactics
Building richer consumer profiles using demographics, psychographics, cookies/tagged data, and 1:1 first-party data – in a shift from “broad reach” to “individual connection” – improves the customer experience and loyalty. Here’s how some top brands are leveraging tools like Salesforce Marketing Cloud to collect this insightful and more meaningful first-party data:
- Webform Collection (whether in Pardot, MCE, etc.)
- Interactive Email
- Social Media
- Journey Builder
- Preference Centers
No matter what MarTech you’re using to collect the first-party data, you need a place to ingest, harness, and unify it for each unique customer in order to execute the powerful level of personalization discussed earlier. That’s where CDP and technology comes into play. From a Salesforce perspective, that’s DataCloud CDP.
Use Technology to Successfully Transition to a Cookie-less Future
Salesforce in particular has shifted its product investment from cookie-reliant solutions like Audience Studio to solutions that are focused on helping customers manage and optimize the use of first-party data to create a deeper connection with their customers. Those solutions are Data Cloud, CDP, and Marketing Cloud Personalization (MCP).
CDP (Customer Data Platform)
At ListEngage, our first step on the path to success with clients is to help them put systems in place that allow them to build and grow a single source of truth for their customer data, which is central to their business. CDP, or Customer Data Platform, is software that consists of a centralized database that has the ability to ingest, integrate, manage, and deliver customer data to other tech solutions in order to personalize the customer experience for marketing, sales, service, commerce, and operations.
For client brands, a struggle is that their data – both known and anonymous, coming in from all over the place and disparate sources – needs to evolve to paint a complete picture of each unique individual. While some of this data may live within current products in their martech stack, some of it – like in-store POS data, legacy loyalty data, and data from BI tools – does not. DataCloud CDP collects, ingests, and manages data to create a single unified view of their customers, which allows for more insights and personalization opportunities across every interaction with AI at hyper-scale.
With DataCloud CDP you can also expand the notion of trust with your customers, clearly define your single source of truth, and deliver rich insights to drive success in both analytics and activation. DataCloud CDP can help brands digitally transform into a cookie-less future and create a first-party data strategy that is not dependent on 3rd party data.
Bring your 1st Party Data to life to create an amazing customer experience. Marketing Cloud Personalization (MCP) is a 1-to-1 personalization tool that helps to deliver real-time, cross-channel personalization at scale. What it does at the highest level is it listens to how customers are interacting with your brand across channels, interprets that data to understand each individual, and then It acts on customer attributes, insights gathered, and business rules to deliver the right experience(channel/content), recommendation or next best action/offer in real-time. It does all this, listening, decisioning, and actioning in under 30 milliseconds. That’s ludicrous speed.
Marketing Cloud Personalization Core Capabilities & Benefits
- Unified Customer Profile
- Deep Behavioral Tracking with Business Context
- Real-Time Rules-Based Decisioning, Segmentation & Experience Delivery
- AI/Machine Learning Applied Throughout 1:1 Experiences
- A/B Testing
- Campaign Analysis
Marketing Cloud Personalization impacts many areas of a business across key metrics including a 15% increase in conversion rate, an 8% increase in revenue, a 9% decrease in servicing costs, and a 12% decrease in customer attrition all while increasing their customer lifetime value (LTV). Customers who receive meaningful experiences are more loyal, remain customers longer, and buy more (i.e. respond to upsell/cross-sell opportunities, higher AOV) over time.
As brands move into a first-party data future, obtaining customer consent, unifying and harnessing customer data in a CDP, and leveraging Personalization will be key in delivering the experiences customers expect and the ones that keep them coming back to your brand versus going elsewhere. Stay tuned to the blog for more information on how to start a first-party data strategy.